Bausch Health (Symbol BHC) [was Valeant (Symbol-VRX)]

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nisser
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Bausch Health (Symbol BHC) [was Valeant (Symbol-VRX)]

Post by nisser »

Anyone own/follow this and have any thoughts? This company has smelled very fishy from the beginning. Why is the company waiting till monday to "refute the accusations". These accusations are slashing your market cap in half; why not tackle them ASAP?
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Re: Valeant (VRX)

Post by SkaSka »

Only thing I know is that a lot of hedge funds have positions and a certain value investing forum has a long, dedicated thread to this specific stock. I do find it quite peculiar that so many in this specific investing forum found/continue to find this stock so intriguing from a "value" lens.

I myself know nothing about pharmaceuticals and plead my ignorance.
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Re: Valeant (Symbol-VRX)

Post by AltaRed »

Jason Donville has a BNN piece today on current issues affecting Valeant and perhaps others. One person's viewpoint of course.

http://www.bnn.ca/Video/player.aspx?vid=733612

I don't touch this stuff either.....
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Re: Valeant (Symbol-VRX)

Post by tedster »

I cannot remember the name of the company but I think it was about 5yrs ago. A hedge fund operator put out a false report and made a fortune. The company in question could not make any real rebuttal, something to do with timing and the Exchange. Anyhow, these people are too greedy and I see that Imprimis is teaching Turing a good lesson.
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Re: Valeant (Symbol-VRX)

Post by like_to_retire »

AltaRed wrote:Jason Donville has a BNN piece today on current issues affecting Valeant and perhaps others. One person's viewpoint of course.
Scary.

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Re: Valeant (Symbol-VRX)

Post by SkaSka »

tedster wrote:I cannot remember the name of the company but I think it was about 5yrs ago. A hedge fund operator put out a false report and made a fortune. The company in question could not make any real rebuttal, something to do with timing and the Exchange. Anyhow, these people are too greedy and I see that Imprimis is teaching Turing a good lesson.
Reminds me of Bill Ackman and the whole Herbalife drama that's been playing out for years between his hedge fund and trying to short Herbalife to death.

I don't understand how he can pursue his "crusade" against Herbalife with a straight face. The funniest thing about that whole drama is how other notable hedge funds swoop in to buy Herbalife shares as the price falls from Ackman's actions :lol:

And just so I'm not totally off tangent talking about Bill Ackman - his hedge fund has a large stake in Valeant.
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Re: Valeant (Symbol-VRX)

Post by tedster »

If what these people do is release false information, how does the industry control this? It is worse than insider trading.
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Re: Valeant (Symbol-VRX)

Post by Hammerer »

I have a lot of academic pharma knowledge, so I stay out of it economically in order to hedge my human capital :)

What always worried me about the stock is that M&A is nothing new in big pharma, so how the heck is this company doing such a better job?

I can understand how a company like Alimentation Couche-Tard can do well buying up every small-medium player in a fractionated industry and gain some efficiencies, but pharma have dozens of such potential acquirers hungry for anything accretive.

I bought VCN instead of VCE for my Canadian exposure because VCN held less VRX.

Can anyone PM the link of the other forum with the VRX thread?
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Re: Valeant (Symbol-VRX)

Post by ig17 »

Hammerer wrote:Can anyone PM the link of the other forum with the VRX thread?
Why be secretive about it?

http://www.cornerofberkshireandfairfax. ... -%28vrx%29
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Re: Valeant (Symbol-VRX)

Post by SkaSka »

ig17 wrote:
Hammerer wrote:Can anyone PM the link of the other forum with the VRX thread?
Why be secretive about it?

http://www.cornerofberkshireandfairfax. ... -%28vrx%29
I suppose some might interpret it as "outstanding financial pornography"?
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Re: Valeant (Symbol-VRX)

Post by Wallace »

I don't own it but the revelations are fascinating and the "red flags" are very reminiscent of Enron. Enron used "fake" companies to unload debt. Valeant hasn't disclosed ANY relationship with the pharmacies used to distribute its drugs until recently, so the question is whether Valeant is using these companies to record "fake" sales? And has Valeant found a way to use them to take debt off its books?

Bloomberg has a really interesting video here
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Wallace
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Re: Valeant (Symbol-VRX)

Post by Wallace »

AltaRed wrote:Jason Donville has a BNN piece today on current issues affecting Valeant and perhaps others. One person's viewpoint of course.

http://www.bnn.ca/Video/player.aspx?vid=733612

I don't touch this stuff either.....
This is nothing more than an eight-minute rant against short-selling by a fund manager who has lost considerable value in his portfolio. He doesn't attempt to deal with any of the very real red flags fluttering over this company.

I don't own Valeant either. And I've never had the strength of conviction to short........
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Re: Valeant (Symbol-VRX)

Post by ig17 »

SkaSka wrote:I suppose some might interpret it as "outstanding financial pornography"?
I dunno, I enjoy the show. It's very entertaining, if you are a stock market geek.
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AltaRed
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Re: Valeant (Symbol-VRX)

Post by AltaRed »

Wallace wrote:This is nothing more than an eight-minute rant against short-selling by a fund manager who has lost considerable value in his portfolio. He doesn't attempt to deal with any of the very real red flags fluttering over this company.
Of course it is a rant but it does indicate what can happen with high flying momentum stocks. They attract the interest of hedge funds and short sellers and other shadier types. I've never understood the 'greed' of people (money managers and retail investors alike) jumping on these bandwagons.

Added: It also indicates the dangerous game a company like Valeant plays. Did the idiots at the top (ex-McKinsey/Goldman Sachs types) think the responsible public would not notice grotesque increases in drug prices? Never mind the possibility of accounting irregularities. The game had to grind to a halt sometime. I saw an article now saying company debt is now about equal to its market cap.
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Re: Valeant (Symbol-VRX)

Post by SkaSka »

I take this all as great financial entertainment, akin to WWF.

If anyone wants to read through Bill Ackman's presentation on Valeant he released today, here it is.

To be honest I'm only interested in the entertainment value of this whole drama, so I didn't read through that carefully.

The greatest entertainment value I've gotten so far today is Herbalife's troll on Ackman:
“I hope Bill Ackman has done more research on Valeant than he did on Herbalife, Target, Borders and JC Penny.”
- Alan Hoffman, executive vice president, global corporate affairs, Herbalife.
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Re: Valeant (Symbol-VRX)

Post by Thegipper »

I wouldn't touch it until it's out of the news and has demonstrated really strong earnings and fundamentals. A concern I have always had is the amount of debt on the balance sheet.
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Re: Valeant (Symbol-VRX)

Post by Hammerer »

So is this one going to zero or what?
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Re: Valeant (Symbol-VRX)

Post by DenisD »

Not according to one of our esteemed hedge fund managers. :wink:
[b][url=http://www.financialwisdomforum.org/forum/viewtopic.php?p=572516#p572516]earlier today[/url][/b] ockham wrote:Let's close my short position in VRX, please. Down >40% at the moment from Friday's close.
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Re: Valeant (Symbol-VRX)

Post by kcowan »

On Monday, Kevin O'Leary called it toxic waste on BNN.
On Tuesday, he was back to gloat.
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Re: Valeant (Symbol-VRX)

Post by ockham »

DenisD wrote:Not according to one of our esteemed hedge fund managers. :wink:
[b][url=http://www.financialwisdomforum.org/forum/viewtopic.php?p=572516#p572516]earlier today[/url][/b] ockham wrote:Let's close my short position in VRX, please. Down >40% at the moment from Friday's close.
VRX up today. Maybe I'll change my name to Kevin O'Ckham and hit the talk show circuit. I'm pretty obviously an expert :rofl:
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Re: Valeant (Symbol-VRX)

Post by westcoastfella »

I've been following this the last couple of days - you don't often see large companies fall so far so fast (outside of larger market corrections), so this one is interesting.

Despite what the stock price is doing, this company seems far from dead - they still have a diversified product portfolio, they are still making money (even revised downward guidance is calling for 9.50-10.50 FY EPS, which is quite a bit for a company that only trades at about $40), their debt seems to be manageable at current EPS. The only risks I can see is their product line is getting long in the tooth (with a very slim future pipeline), debt becoming unmanageable as it matures, bad management, and that investor sentiment is very negative towards them.

I'm admittedly new to VRX and have not followed them before, but the investor in me is looking at this as a potentially profitable gamble - certainly there seems to be more potential for upside than there is for further downside. What am I missing?
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Re: Valeant (Symbol-VRX)

Post by nisser »

Drawbacks
1. It's a growth by acquisition story where they buy unloved drugs and then markup the price to oblivion. There's less fish in the sea to swallow and people are becoming increasingly resistant to the price-gouging. Their debt to cashflow is already rather high (6 to 1 or so) with potential to get even worse if prices have to come down.

2. Their management seems completely incompetent at diffusing and alleviating market concerns time after time. You could probably use them as a case study on what NOT to do. It makes you wonder whether they're good at managing the company at all.
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Re: Valeant (Symbol-VRX)

Post by AltaRed »

A pretty good Canadian Business synopsis of the results of a CEO's 'out of the box' thinking. If a company is outdistancing its competition by a wide margin, there us probably 'wild swings' going on behind the scenes.
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Re: Valeant (Symbol-VRX)

Post by brad911 »

nisser wrote:...Their management seems completely incompetent at diffusing and alleviating market concerns time after time. You could probably use them as a case study on what NOT to do. It makes you wonder whether they're good at managing the company at all.
I couldn't agree more from my viewpoint. I've never held shares in the company, but they definitely don't fit my 5% Rule.

Generally I would rather hold a company whose management has the pulse of the business; meaning they can predict within a +5% or -5% of their performance. Nothing has given me the perception that the leadership at the top of VRX has a clue. Most likely they're just manipulating numbers also
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Re: Valeant (Symbol-VRX)

Post by kcowan »

AltaRed wrote:A pretty good Canadian Business synopsis of the results of a CEO's 'out of the box' thinking. If a company is outdistancing its competition by a wide margin, there us probably 'wild swings' going on behind the scenes.
Here is another analysis that is financial rather than market focus:
Commentary by Running_Man
which I thought was a good summary for any potential investor.
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